Labor supply responses to marginal Social Security benefits: Evidence from discontinuities

A key question for Social Security reform is whether workers respond to the link on the margin between the Social Security taxes they pay and the Social Security benefits they will receive. We estimate the effects of the marginal Social Security benefits that accrue with additional earnings on three measures of labor supply: retirement age, hours, and labor earnings. We develop a new approach to identifying these incentive effects by exploiting five provisions in the Social Security benefit rules that generate discontinuities in marginal benefits or non-linearities in marginal benefits that converge to discontinuities as uncertainty about the future is resolved. We find that individuals approaching retirement (age 52 and older) respond to the Social Security tax-benefit link on the extensive margin of their labor supply decisions: we estimate that a 10% increase in the net-of-tax share reduces the two-year retirement hazard by a statistically significant 2.0 percentage points from a base rate of 15%. The evidence with regard to labor supply responses on the intensive margin is more mixed: we estimate that the elasticity of hours with respect to the net-of-tax share is 0.42 and statistically significant, but we do not find a statistically significant earnings elasticity. Though we lack statistical power to estimate results within subsamples precisely, the retirement response is driven mostly by the female subsample, while the hours response comes from the male subsample.     

Capital Inflows to Hungary in 1995–96 and the Accompanying Policy Responses

In order to analyze the composition and effects of, and the policy responses to, capital inflows to Hungary during 1995–96, we present an analytical framework that emphasizes the distinction between net capital flows to the private and public sectors (the latter includes the government and the central bank). This distinction is essential in Hungary's case, because figures for overall net inflows conceal the fact that huge net capital inflows to the private sector were accompanied by large repayments of foreign public debt, covered by significant privatization revenues. We present indicators of the domestic monetary impact of net capital inflows in order to analyze the magnitude, costs, and effects of sterilization. We note that extensive sterilization and the use of privatization revenues for public debt repayment largely explain why capital inflows to Hungary did not have significant effects on the real economy or on domestic monetary aggregates in the period reviewed.     

Cost-utility analysis of the rehabilitation of patients with musculoskeletal problems

The objective of this study is to discuss the rehabilitation of patients in primary health care with problems in the musculoskeletal system from a socioeconomic perspective. A trial with coordinated rehabilitation in primary health care is compared with traditional rehabilitation. This trial, performed in Sweden in 1994, was a two-year prospective and comparative study of consecutively included patients with long-term illnesses due musculoskeletal problems (810 observations). A cost-utility analysis shows that the new rehabilitation program in primary health care is a cost-minimization program for society. There is no significant difference in the quality of life between the trial and control groups. The total cost is lower for rehabilitation in primary health care than for traditional rehabilitation (6 percent). The indirect costs are higher than the direct health care costs (60 percent), and payments from social insurance increased by 8 percent. The health economic results support rehabilitation in primary health care but also points out that this type of rehabilitation can be further improved.     

Professional tensions in science and technology: the case of the Colleges of Advanced Technology

Two possible patterns for the organization of advanced technological education can be detected in Britain since 1945. The dominant assumption links training closely to fundamental advances in the sciences, and centralizes teaching at a small number of specialist institutions. The influence of such a policy is seen in the decisions which limited the numbers of Colleges of Advanced Technology in 1956, and in the continuing pressure from science advisory circles for the establishment of a few high-level training centres. The alternative pattern seeks to respond to the diverse range of industrial demands at local level in a decentralized system of technological training whose goals and standards are readily influenced by the technical and manpower demands of neighbouring industry. Neglect of this alternative can be explained from persistent trends in British professional organization, but the economic consequences may well be momentous.     

Forecasting as an aid to R & D decision making in the nuclear power field

Abstract The pay-off from a new power system does not begin to accrue until many years after the initial research; and perhaps not until 10 years or more after major development programmes are launched. The ensuing benefit to the community in terms of reduced power costs may be spread over 30 to 40 years—combining the lifetime of the stations with the period over which they might be installed. Ideally therefore, the Atomic Energy Authority would like to have accurate forecasts of electricity demand and its characteristics in terms of load factors, etc., 30 to 40 years ahead. This paper describes attempts by the Authority to forecast electricity requirements at and beyond the end of the century as a background to their consideration of the relative merits of alternative future nuclear power systems and the distribution of research effort between them.
The study was conducted between 1969 and 1971. The danger of the Middle East countries restricting oil supplies and raising prices was foreseen but in a less acute form and later than has actually occurred. The recent developments are likely to lead to pauses in economic growth followed by growth at lower rates than otherwise. Where forecasts in this article are given in the form of ranges, the lower bounds of the range are likely to apply—at least in the short and medium term.